From spiky, red-soled stilettos to quilted Chanel booties, one Triangle-based startup wants to ensure women across the country, regardless of budget, have a chance to slip into designer shoes.
March 8, 2016
This Raleigh Startup Wants Everyone to Have Louboutins
Luxury Shoe Club readies beta launch of app for sharing and swapping designer footwear
It’s all made possible by a mobile application for iOS that offers a marketplace solely dedicated to luxury footwear.
It’s called Luxury Shoe Club, and it’s launching later this year to the masses. Luxury Shoe Club is part of the growing number of companies that take advantage of a “shared economy”. Users post their used designer heels for the chance to swap with other club members.
Like home sharing site Airbnb, which lets users rent their empty apartment or home for a profit, LSC allows members the chance to turn their old shoes into new shoes. Both companies recognize the inherent value in eliminating waste, whether it is monopolizing unused home space or opening up extra closet space. But unlike Airbnb or other similar companies, LSC members do not rent someone else’s shoes, they get to keep them.
After winning an NC IDEA grant in 2015, LSC has been working with developers in Indonesia and California to create an app that will allow members to list and swap their gently-used designer shoes.
LSC, which operates out of HQ Raleigh, already has more than 100 women from across the U.S. signed up to test its beta, which will launch by the end of March. The company’s founders, who prefer to go by “the Shoe Diva” rather than reveal their identities, are using the beta as a way to build up inventory before the company’s full launch later this year. They say that users’ response to the concept has been overwhelmingly positive.
“It’s been really good validation looking at the response we’re getting through social media, (…)the response of people who are converting over and trying out the application,” the Shoe Diva says. “There is a market out there. It’s a new way to do things and people are asking questions—they love the concept.”
The way the club works is fairly simple.
Members subscribe to the club by selecting one of three levels—obsessed, passionate and intrigued. Subscriptions range from $215 to $650 a year. Following admission to the club, members are sent flat-rate, and sometimes pre-paid, boxes to ship their shoes to wherever their new homes might be.
In order to get members moving in the marketplace while they establish enough points to make a purchase, the club offers most members 50% of their shoes’ points once they post on the app (“Intrigued” members receive 25% of their shoes’ value). Members receive their shoes’ remaining points once they are sold in the marketplace. Members can also purchase club points through the application.
Once members have an adequate amount of points, they use those points to purchase another member’s designer shoes.
The only required fees for LSC are those collected annually for membership. At $650, “Obsessed” is the most expensive subscription but it also comes with the most benefits, including free shipping on 12 shipments each year and a 15% discount on purchased points. “Passionate” members pay $385 annually to use the app and receive six free shipments each year and a 10% discount on purchased points . “Intrigued” members pay $215 annually and receive just one free shipment each year.
Members can ship as many shoes as they as they want each year, but they’ll have to pay the shipping for anything above what’s included in their subscription plan.
LSC is currently offering a 50% discount on all subscriptions to the group of 100 it’s calling the “Founder’s Circle.”
While the costs might seem high to some, the company’s founders believe their fees are small in comparison to what members get out of club membership. For instance, if a member buys seven pairs of shoes through LSC with each pair averaging a $700 value, she will effectively save $4,250 on luxury footwear. The company also donates up to 3% of each new member’s fee to a charity that empowers women to achieve economic independence to thrive in work and get back on their feet.
The biggest concern for the company’s founders is how to ensure there is not only enough merchandise on the marketplace, but that the shoes are also in good condition.
Company policy allows users to return their shoes for a points refund with no questions asked within seven days of purchase. The Shoe Diva says club members can police one another about the quality and condition of shoes within the marketplace, which the company hopes will help control quality and prevent potential forgeries.
Sriraman Venkataraman, a marketing professor with UNC Kenan-Flagler Business School, says the company’s strategy aligns with the shared consumption model that has sprouted up across the country in recent years and seems to be extremely popular with young people.
“The broader landscape is just this whole shared consumption idea, and it’s something that’s relatively new,” he says. “And when it comes to the younger generation, it seems like this is a business model that appeals to them. They are less averse to it and it seems that there are more average spokespeople for this model.”
He believes since the recession, consumers are less focused on outright owning a product and are now more focused on having access to a product, which is something the LSC provides.
Venkataraman adds “non-cash” paying makes it easier for customers to spend more because they do not feel as if they are spending at all.
“If you can engage in social good, reduce wastage and do it without necessarily hurting people’s pocketbooks, it’s a win-win cause,” he says.
After nearly a year of work, the company’s beta launch is just weeks away, but that isn’t keeping the founders from focusing on their next designer-clad steps.
“Depending on the market reaction, the uptake, the business model allows us to fund our growth, and if we find that we really have to accelerate and we’re showing positive results, we’ve got some positive conversations with early-stage VCs that are keeping an eye on us,” the Shoe Diva says.